U.S. Steel offers to buy back $500 million of 7%, 7 3/8%, 6 7/8% notes

By Angela McDaniels

Tacoma, Wash., May 10 – United States Steel Corp. began tender offers for up to $500 million aggregate principal amount of its $486,967,000 outstanding 7% senior notes due 2018, $600 million outstanding 7 3/8% senior notes due 2020 and $275 million outstanding 6 7/8% senior notes due 2021, according to a company news release.

The notes are listed in order of acceptance priority. In addition, the company will purchase no more than $150 million principal amount of 7 3/8% notes and no more than $50 million principal amount of 6 7/8% notes.

The tender offers will expire at 11:59 p.m. ET on June 7.

For each $1,000 principal amount of notes, the total consideration is $1,070 for the 7% notes, $860 for the 7 3/8% notes and $820 for the 6 7/8% notes.

In each case, the total consideration includes an early tender premium of $50 for notes tendered by the early tender date, 5 p.m. ET on May 23.

The company will also pay accrued interest up to but excluding the settlement date.

United States Steel reserves the right, at any point following the early tender date and before the expiration date, to accept for purchase any notes tendered by the early tender date. This early settlement date is expected to be May 24, and the final settlement date is expected to be June 8.

If the tender offers are not fully subscribed as of the early tender date and the company elects to have an early settlement date, holders who tender notes after the early tender date may be subject to proration, whereas holders who tender notes by the early tender date will not be subject to proration, subject to the applicable series maximum tender amounts.

In addition, if the aggregate principal amount of capped notes tendered in the applicable tender offer by the early tender date exceeds the applicable series maximum tender amount, or if the aggregate principal amount of notes of all series tendered by the early tender date exceeds the tender cap amount and the company elects to have an early settlement date, notes tendered after the early tender date will not be eligible for purchase.

However, in the event the company does not elect to have an early settlement date and the applicable tender offer is fully subscribed, or the aggregate principal amount of notes of all series tendered by the expiration date exceeds the tender cap amount, as applicable, all holders who tendered notes will be subject to proration, subject to the application of the acceptance priority levels and the series maximum tender amounts.

The tender offers are not conditioned on any minimum tender condition.

The dealer managers are BofA Merrill Lynch (980 388-3646 or 888 292-0070), Credit Suisse Securities (USA) LLC (800 820-1653 or 212 325-6340), Goldman Sachs & Co. (800 828-3182 or 212 902-6941) and J.P. Morgan Securities LLC (212 834-3424 or 866 834-4666).

The information agent is D.F. King & Co., Inc. (212 269-5550, 866 796-7179 or uss@dfking.com).

The steel company is based in Pittsburgh.

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